The FOMC is the body of the Federal Reserve of the U.S. responsible for defining monetary policy — among other things, it sets the federal funds rate and decides on liquidity measures or monetary restrictions.
Its decisions — to maintain, raise, or lower rates — have a direct impact on global liquidity, the value of the dollar, risk appetite, and generally on financial markets (bonds, stocks, debt, risk assets).
For crypto assets like Bitcoin (BTC) or Ethereum (ETH), FOMC announcements tend to generate waves of volatility. Higher rates — or signals of monetary tightening — usually weaken demand for risk assets, which can negatively impact crypto. Low rates or accommodative policies may favor increases.
Therefore, each FOMC meeting is a key event for those trading or investing in crypto: it can redefine trends, risks, and spur quick reactions in the markets.
🧠 Why it carries so much weight for crypto
Some concrete reasons why the FOMC strongly influences crypto:
Global liquidity and risk appetite: FOMC decisions change the cost of money, which affects global capital flow. If there is more liquidity and low rates, investors might move towards crypto in search of returns. If rates are high, they might prefer 'safe' investments or more traditional havens.
Value of the dollar and alternatives to fiat: A strong dollar — a consequence of high rates — can weaken the narrative of crypto as a 'store of value against devaluation'. Conversely, a weak dollar could favor crypto as a global alternative.
Volatility as opportunity or risk: FOMC announcements often generate market 'shakes' — which for traders means risk, but also opportunity for quick entries/exits.
The FOMC does not dominate all market factors. Crypto depends on many others: institutional adoption, specific events (hacks, regulation, ETFs, news), global macro situation, general sentiment. The Fed's announcement is just one macro factor.
Reactions may vary: although historically a drop in rates tends to favor crypto, it doesn't always happen — because there can be shocks between interest rates, inflation, real market demand, expectations, etc.
High speculation: many posts under that hashtag may be more speculative than analytical — rumors, 'fear/greed', short-term interpretations. It's advisable to distinguish serious analysis from noise.
